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Event Report: Economic Implications of Demographic Change (October 23, 2014)

Atlantic Research Group on Economics of Immigration, Aging and Diversity

The Atlantic Research Group on Economics of Immigration, Aging and Diversity (ARGEIAD) was established in February 2014 with a mandate to promote research and knowledge mobilization focusing on national and regional dimensions of immigration, diversity, and aging in order to uncover the facts about their economic significance. Its key priority research areas include labour market performance of immigrants (and non-immigrants),  economic impact of immigration, population diversity and aging in Atlantic Canada, smaller jurisdictions in particular, and their implications for business and public policy.

To fulfill its mandate, ARGEIAD:

  1. collects and analyzes statistics (generated by Statistics Canada and Citizenship and Immigration, Canada) on immigration and demographics in Atlantic Canada with the help of the Province of Nova Scotia,
  2. publishes a quarterly online newsletter to disseminate the findings of statistical analysis on immigration, aging and diversity and
  3. provides its members an opportunity to publish their research. 

Economic Implications of Demographic Change, October 23, 2014

To further its mandate, the group held its first public outreach event on October 23, 2014. This was a half-day research session whose objectives were twofold: 1) to highlight the significance of demographic change in Atlantic Canada with implications for its business and economic environment, possible solutions and also to identify some important research questions that can help direct research agenda of ARGEIAD and 2) to provide regional researchers an opportunity to present their research on a public forum. The event was attended by 105 members of municipal, provincial and federal governments, settlement organizations, university faculty, researchers, students and the news media. A live broadcast of the event was also held, with 26 people viewing remotely. The event was covered by Chronicle Herald, a Halifax newspaper, both before and after the event. An event evaluation survey was conducted after the event. Respondents’ feedback will inform future events. The event was held at Saint Mary’s University.

Atlantic Canada Opportunities Agency was the main funder of the event which was also co-sponsored by the Sobey School of Business (Saint Mary’s University) and the Office of Vice President at Saint Mary’s University.

Summary of the Event

The event comprised two sessions. The first included a keynote speech by Canada’s leading economic demographer, professor David Foot of University of Toronto who spoke on economic implications of aging in Canada. The second session comprised three short presentations by ARGEIAD members on topics related to immigrant retention and temporary foreign workers.  David Foot: Economic Implications (PDF)

Following is a summary of the event’s proceedings. 

Session I: Keynote speech--Economic implications of demographic change

Dr. Foot’s speech focused on economic implications of demographic change. He analyzed detailed data on aging trends in provincial populations in Canada. His data, based on population census and other database of Statistics Canada, also covered some small cities and towns of Atlantic Canada. He provided a detailed analysis of the potential impacts of population aging on labour markets, social programs, housing, retail sectors, utility sector, and government finances. Following is a synthesis of his presentation:

Labour market and government budget implications of aging population
Labour force participation rate of elderly Canadians is lower than younger Canadians, hence it is expected that population aging will slow down economic growth in Atlantic Canada more than nationally as its population is aging at a faster rate. It is important for businesses to incorporate slow economic growth in their expansion plans.
While it is often argued that population aging has resulted in labour shortages, there is little evidence in this regard. In fact, a labour market shortage did not emerge in the new millennium because the Echo generation (children of the Boomers, born in 1980-96) entered in the labour force - instead there has been a jobs shortage with high unemployment rates. This job shortage appears to be a result of slower economic growth than was experienced in the 1960s or, due to structural changes in the labour markets to which aging population is slower to adjust. At the same time, youth unemployment has also been high, because as the labour force becomes older, job creation and security for the older workers is becoming a priority in labour market programs. Flexible workplace (and pension) policies are needed to accommodate older workers who are healthier than in the past but may not wish to work full-time.
Fiscal implications
As population aging causes economic growth to slow down, there are negative implications for government revenue.  Hence, it is important for governments to incorporate slow economic growth while planning for fiscal expenditures. Declining population base of taxpayers will further aggravate this problem. 
Implications for industries
As the needs of aging population are different from the young, their growth is likely to cause a shift in composition of the population’s demand for goods and services. Implications for natural resource industries and recreational facilities were highlighted.  As people get old, they demand more fish. Their demand for such utilities as electricity and oil also increases as they tend to ameliorate the extremes of temperatures in their dwelling. Aging populations participate less in sports (hockey, tennis, skiing) and more in leisure (walking, physical fitness, birding, gardening) activities. These industrial shifts in demand have important implications for businesses and governments.
Implications for education and health sectors
College and university enrolments will continue to decline for at least a decade, a reflection of reduced births in the 1990s and early 2000s (itself an echo of the reduced births in the 1960s).  Given the resulting excess capacity of our post-secondary institutions, this raises the need to increase the share of foreign students in our student population.
Demand for health care services rises with age and hence there is a need to identify the types of health care needs of elderly and plan for their provision. Since the composition of elderly in rural populations is higher than in urban areas, rural planning should pay more attention to health care provision.  
Concern for the young in an aging society
Young workers are more adaptable to changing labour market requirements. However, their preferences and priorities are different from the elderly. Hence, social programs should also pay attention to their demands. They are more attracted to cities and also tend to work in Information Technology (IT) sector. Hence, any municipal and rural development planning should account for differential demographic composition of population. 
Impact of immigration in an aging society
Immigrants are generally young at the time of arrival (25-44 year old). Hence, immigration can be viewed a source of reversing aging trend of resident population. However although Canada welcomes 250,000 immigrants each year, on average, this number is too small to offset the aging of its population. Furthermore, the offsetting effect of immigration on aging population is likely to be uneven across regions as immigrants tend to gravitate towards larger provinces and larger urban centres. Research also suggests that immigrants in the new millennium are slightly older than those who came in the past.

In summary, the main conclusion of Dr. Foot’s address is that demographic change of population requires adjustments in economic planning not only at the national level but also at provincial level and in rural development strategy. An appropriately designed policy that accommodates a shift in the composition of industries and in the provision of social services, in the wake of demographic change, can have positive implications for the economy. 

Session II:  Research presentations by members of ARGEIAD

Dr. Foot’s keynote speech was followed by a lunch session with three short presentations by researchers based in Atlantic Canada who are also members of ARGEIAD. These presentations focused on retention of immigrants in general and of language minority immigrant in particular, and on temporary foreign workers. They are summarized below.

Professor Michael Haan of University of New Brunswick based his presentation on an ongoing research. He discussed the factors at the individual and community level that affect the retention of Anglophone and Francophone immigrants in Canada. His research analyzes the role that official language minority communities (OLMCs) might play in immigrant retention, and also discusses the implications for Atlantic Canada. Dr. Haan outlined where Anglophone and Francophone immigrants settle, how this differs from where Anglophone and Francophone communities are located, and if retention rates vary depending on other variables, such as level of education, marital status, presence of children, landing category and so on. He also discussed community level characteristics as potential factors impacting recruitment and retention. The number of OLMCs has consistently declined nationally, from 2015 in 1990 to 1705 in 2005. However, their numbers have risen in Atlantic Canada from 230 in 1990 to 285 in 2005. While the largest number of OLMCs reside in New Brunswick (200 in 2005), their numbers have doubled in Prince Edward Island from 25 in 1990 to 50 in 2005. Overall, immigrants’ tendency to out-migrate from the initial province of landing declines if they are married or as they get older. Refugees have higher out-migration rates and education does not have any consistent impact on out-migration. For OLMCs, Haan’s results indicate that they help retain Anglophone immigrants in Quebec and provide an additional pull for Francophones in the rest of Canada. Although Atlantic Canada represents a disproportionate number of OLMCs, their rising numbers call for community specific policy and research for their retention. In particular, it is important to investigate if immigrants choose “institutional completeness” over a job. Michael Haan Official Language Minority Communities and Immigration PDF

Ms. Donna Safatli of University of New Brunswick addressed a similar topic but at a more general level. This presentation is also based on an ongoing research which Ms. Safatli is conducting for her doctoral thesis. She analyzed factors that cause new immigrants to Atlantic Canada leave for other provinces. Historically, immigrants arriving in Canada have gravitated towards three large urban centers: Toronto, Ottawa and Montreal. Poorer and less populous regions, such as Atlantic Canada, have received fewer immigrants, and of those who do arrive in smaller regions tend to leave shortly after their arrival. Using data compiled from in-depth face-to-face interviews with recent former newcomers, this presentation offered a preliminary descriptive profile of the factors associated with the outmigration of recent immigrants from Atlantic Canada, issues raised from recent federal policy shifts, and the implications for Atlantic Canada. Factors that were identified in Ms. Safatli’s research as responsible for out-migration of new immigrants from the region included: lack of jobs in related fields of experience, concerns for lack of jobs for other family members, lack of opportunities to establish business in a field of interest, lack of ethnic communities and support, language barriers, desire to love closer to relatives in other parts of Canada. Some interviewees also felt that provinces outside of the region provided better education opportunities children and also better medical benefits. Ms. Safatli then combined her research findings with the perspectives gained from Atlantic Research Symposium, that was held in May 2014, to conclude that: 1) the new language standards introduced in recent federal policy are likely to further aggravate the feeling that there is a language barrier which will negatively affect the ability of Atlantic provinces to retain immigrants, 2) new federal programs de-emphasize family reunification which can affect retention of those desiring to live closer to relatives, and 3) new policies are needed to promote support groups and provide funding because if the lack of ethnic communities in the region. Donna Safatli: Why do Immigrants Seek Greener Pastures

Professors Leyla Sall and Eric Thomas of University of Moncton analyzed the impact of recent changes made to the Temporary Foreign Worker Program (TFWP) on New Brunswick’s fish and seafood processing industry which relies heavily on immigrant workers to fill labour shortages.  The reliance on the TFWP by some industries in the province has left the federal government somewhat perplexed since New Brunswick (like the other Atlantic provinces) is known for its usually high unemployment rate. The federal government is therefore pointing to available local workers claiming employment insurance as a solution to fill the labour needs of the processing industry. In the federal government’s view, there are no shortages of labour in this industry.

Several public policy implications arise from this presentation. First, there is a need to take into account the realities of regional or local labour markets by not only considering crude quantitative data but by also paying attention to the qualitative dimensions of labour shortages as experienced on the local scene. While the processing industry can rely on a core of loyal “old hands,” new local recruits are less interested in accepting this type of job. As such, there is a need for more consultation on how to deal with the challenges that the processing industry are facing and a need for more qualitative research on local labour market dynamics.

Second is the issue of the timeframe for the phasing out of the program. The cap imposed in the reform (30% to 10% in three years) is considered too severe and does not give the businesses in the processing industry enough time to make the necessary adjustment without considerably affecting the level of production. Reviewing this timeframe would make the changes more acceptable in the long term and make it easier for processing businesses heavily dependent on the TFWP to adapt accordingly.

Third, it has been suggested that a form of exemption be given to the industry because of its seasonal aspect (a program like the Seasonal Agricultural Worker Program). The acute labour needs of the industry are mostly felt during peak periods which only last for a short period. This proposition should be evaluated more thoroughly. Alternatively, other stakeholders suggest that “low-wage” or “low-skill” temporary foreign workers be given a better access to permanent residency. This would contribute to community building in rural areas experiencing population decline. More research needs to be done on the integration and retention of temporary foreign workers living in rural and usually distant communities. Currently, even when there is a willingness to do more, rural host communities in New Brunswick are often left without the proper resources to deal this new diversity.

Finally, it should also be noted that the latest changes made to the TFWP do not address the vulnerable and precarious legal state in which migrant workers find themselves. More needs to be done by the federal and provincial governments to protect the rights and wellbeing of temporary foreign workers.   

In summary, the factors highlighted in the first two presentations that determine immigrant retention are important for Atlantic Canada where immigrant retention is the least compared to the rest of Canada. Because of low retention of immigrants, the region also relies heavily on temporary foreign workers and, as the third presentation noted, any changes in the temporary foreign workers program should take into account the specific labour force requirements of the region and also the rights and well-being of workers. 
Eric Thomas & Leyla Sall: TFWs in NB's Fish & Processing Industry (PDF)